Govt sues BP, 8 other companies in Gulf oil spill

December 15, 2010 5:10:21 PM PST
The Justice Department on Wednesday sued BP and eight other companies in the Gulf oil spill disaster in an effort to recover billions of dollars from the largest offshore spill in U.S. history.

The Obama administration's lawsuit asks that the companies be held liable without limitation under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to natural resources. The lawsuit also seeks civil penalties under the Clean Water Act.

"We intend to prove these violations caused or contributed to the massive oil spill," Attorney General Eric Holder said at a news conference.

The federal lawsuit says inadequate cementing of the well contributed to the disaster. Similar charges were made by BP in its internal investigation, and by the independent presidential oil spill commission. But Halliburton Co., the contractor in charge of mixing and pumping the cement, is not named in the suit.

Holder said it is conceivable that additional defendants could be added to the lawsuit. "This is an ongoing process," the attorney general said.

The amount of damages and the extent of injuries sustained by the United States as a result of the Deepwater Horizon Spill are not yet fully known, the lawsuit states.

An explosion that killed 11 workers at BP's Macondo well last April led to oil spewing from the company's undersea well -- more than 200 million gallons in all by the government's estimate. BP disputes the figure.

The department filed the suit in federal court in New Orleans.

The other defendants in the case are Anadarko Exploration & Production LP and Anadarko Petroleum Corp.; MOEX Offshore 2007 LLC; Triton Asset Leasing GMBH; Transocean Holdings LLC and Transocean Offshore Deepwater Drilling Inc. and Transocean Deepwater Inc.; and Transocean's insurer, QBE Underwriting Ltd./Lloyd's Syndicate 1036.

Anadarko and MOEX are minority owners of the well that blew out. Transocean owned the rig that BP was leasing.

Transocean disputed the allegations, insisting it should not be held liable for the actions of others. "No drilling contractor has ever been held liable for discharges from a well under the Oil Pollution Act of 1990," the company said in a statement e-mailed to The Associated Press. "The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator."

QBE/Lloyd's can be held liable only up to the amount of insurance policy coverage under the Oil Pollution Act and is not being sued under the Clean Water Act.

The lawsuit alleges that safety and operating regulations were violated in the period leading up to April 20.

It says that the defendants failed to keep the Macondo well under control during that period and failed to use the best available and safest drilling technology to monitor the well's conditions. They also failed to maintain continuous surveillance and failed to maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources and the environment, the suit charges.

Democratic Rep. Edward J. Markey, D-Mass., a member of the House energy panel that is investigating the spill, acknowledged the government will have a tough fight on its hands since BP has already taken an aggressive stance regarding its liability.

"It may have taken these companies months to cap their well, but they will spend years trying to cap their financial obligations to the people of the Gulf," Markey said. "That is why it is vital for the Obama administration to swiftly advance this legal action."

Before Wednesday, potential class-action lawsuits had been filed in the Gulf oil spill by fishing and seafood interests, the tourism industry, restaurants and clubs, property owners losing vacation renters -- even vacationers who claim the spill forced them to cancel and lose a deposit. So far, more than 300 suits have been spawned by the spill and consolidated in federal court in New Orleans.

Wednesday's move by the Justice Department follows the Obama administration's decision not to open new areas of the eastern Gulf and Atlantic seaboard to drilling. That marked a reversal from an earlier decision to hunt for oil and gas, an announcement the president himself made last spring three weeks before the spill.

The staff of a presidentially appointed commission looking into the spill has said that the disaster resulted from questionable decisions and management failures by three companies: BP, the well owner and operator; Transocean, the owner of the Deepwater Horizon rig; and Halliburton.

The panel found 11 decisions made by these companies increased risk. Most saved time, and all but one had a safer alternative.

Separately, an administrator is doling out money to Gulf oil spill victims from a $20 billion fund of BP money.

The Justice Department isn't the first government entity to sue BP. Alabama Attorney General Troy King filed federal lawsuits in August on behalf of the state against BP, rig owner Transocean, cement contractor Halliburton Energy Services Inc. and other companies that worked on the ill-fated drilling project.

U.S. District Judge Carl Barbier is presiding over most of the consolidated federal suits. In September, Louisiana Attorney General James "Buddy" Caldwell's office asked Barbier to create a "government case track" to handle government-related suits separately from other claims. The judge hasn't ruled on that request yet.

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BP's statement:

As expected, the federal government today filed a civil suit against statutorily defined "responsible parties" under the Oil Pollution Act in order to preserve its procedural rights under the court's case management orders to seek civil remedies resulting from the Deepwater Horizon accident. The filing is solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit. BP will answer the government's allegations in a timely manner and will continue to cooperate with all government investigations and inquiries. Alone among the parties, BP has stepped up to pay for the clean-up of the oil, setting aside $20 billion to pay all legitimate claims. We took these steps before any legal determination of responsibility and will continue to fulfill our commitments in the Gulf as the legal process unfolds.

Transocean's statement:

"No drilling contractor has ever been held liable for discharges from a well under the Oil Pollution Act of 1990. The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator. This fact is made clear by both the letter and spirit of the law, is reinforced in official contracts between BP and other parties ? including Transocean and the U.S. Government ? and was reaffirmed by BP in public statements following the incident. Transocean is indemnified in this matter."

Anadarko's statement:

The Department of Justice's action is not unexpected and more procedural in nature given the numerous independent investigations have not yet been completed. It is our understanding that under the Oil Pollution Act and the Clean Water Act, all of the relevant parties may be named even though ultimate responsibility may rest solely with the operator. As a non-operating minority interest holder in the well, we were not involved in the operations or decisions that occurred on the drilling rig. We recognize that we may have obligations under federal law, and we will continue to look to the operator to pay all legitimate claims as it has committed to do. We stand by our statement of June 18, that the operator's decisions and actions on the rig likely amount to gross negligence and/or willful misconduct, which we believe will have a direct bearing on responsibility under the Joint Operating Agreement.

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